Situations and resolution of personal consuming credit of asia commercial bank o cho dua branch

Analysis situation of loans overdue:...49 3 / Analysis profitable of lending activities for consuming :...49 CHAPTER 3...51 SOME REVIEWS AND RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF

NATIONAL ECONOMIC UNIVERSITY

English Bachelor of Business Administration



Nguyen Binh lam

SITUATIONS AND RESOLUTION OF

PERSONAL CONSUMING CREDIT OF ASIA

COMMERCIAL BANK - O CHO DUA BRANCH

Hanoi - 2015

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TABLE CONTENT

TABLE CONTENT i

LIST OF TABLES & CHARTS vi

CHAPTER 1: INTRODUCTION 1

1.1 Reasons for choosing the thesis 1

1.2 Research objectives 1

1.3 Research questions 2

1.4 Research scope 2

1.5 Research methodology 2

1.5.1  Research process 2

1.5.2  Data collection 2

CHAPTER 2: THEORETICAL BACKGROUND 3

I / Concept, nature and role of credit 3

1.  Concept 3

2.  Characteristics of Credit 4

3.  The function of credit 4

3.1  Focus and redistributed on the basis of monetary capital repayment 4

3.2  Payment Satisfaction and make money 5

3.3.  Credit boost production development: 5

3.4.  Credits contribute to stabilizing the currency and price stability 6

3.5.  Credits contributed to stabilizing the life, create jobs and stabilize social order 6

II Classification of bank credit 6

1.  Based on the loan purpose 6

2.  Based on the tenor 7

3.  Based on the level of reputation for customers 8

4.  Based on the mode of  repayment 8

5.  Based on the origin of the credit 8

III / Customer’s consuming credit 9

1 / The concept and characteristics of consumer credit: 9

1.1  Concept 9

1.2  Features 9

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2 /  Object of consumer’s consuming credit: 9

3 / Classification of consumer credit 10

3.1 /  Direct Consumer credit 10

3.2  Indirect Consumer credit 10

4 / The significance of consumer credit 10

4.1  For consumers 10

4.2 /  For banks 11

4.3 /  For providers 11

5 The measures to gaurantee credit 11

5.1 /  Guarantee credit methodology 11

5.1.1  Concept 11

5.1.2  Classification and collateral conditions 11

5.2 /  Pledge of property 11

5.2.1  Concept 11

5.2.2  The types  of pledging property 12

5.3 /  Guarantees 12

5.3.1  Concept 12

5.3.2  Stakeholders 12

6 / Analysis of consumer’s consuming credit 12

6.1 /  Objective 12

6.2 /  Content of analysis 12

6.3 /  Analysis Method 13

6.3.1  Method score system 13

6.3.2 Judgment method 14

IV/ Factors affecting effective personal credit 15

1/  Factors from the Bank 15

1.1  Credit policy of the Bank 15

1.2  Credit Process 16

1.3  Business banking institutions 17

1.4  Qualities and qualifications of staff 17

1.4  Internal control 18

1.5  The mobilization of capital 18

2 Factors from customers 18

2.1  Capacity of the customer 19

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2.2  The honesty of the customer 19

2.3  Risks in the business of customer 19

3 Collateral 20

3.1  Not keep up with the innovation process 20

4 Other factors 20

4.1  Economic environment 20

4.2  The social environment 21

4.3  Natural environment 21

CHAPTER 3: OVERVIEW OF ACB – O CHO DUA BRANCH 23

1 Introduction 23

2 Business live: monophyletic 24

3 Market scope 24

4 Organization structure 25

4.1.  Structure management apparatus of ACB 26

4.2  Asia Commercial Bank - Branch O Cho Dua 27

4.3.  The organization chart of departments of ACB – O Cho Dua branch 28

5 History and development process 28

5.1.  Origins birth 28

5.2  Strategic Vision 28

5.3  Developing progress 29

7 Evaluate the company: ACB 31

7.1 ADVANTAGES 32

7.2 DISADVANTAGES: 33

CHAPTER 4: ANALYZING THE CURRENT SITUATION OF CONSUMER LOANS AT ACB - O CHO DUA BRANCH 36

I / Products for consumer loans at commercial banks of Asia - O Cho Dua branch 36

1 /  Loan conditions 37

2 /  Procedures for loan 37

3 /  Loan process 37

II/ Evaluate consumer loans at commercial banks of Asia - O Cho Dua branch 41

1 / Analysis of the situation of consumer loans under the loan portfolio structure: 42

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1.1 /  Analysis by loans structure 42

1.2 /  Analysis at the rate of consumer’s consuming loans / Total mobilized capital 44

1.3/  Analysis by tenor of loans 46

1.4 /  Analysis of each loan 47

2 Analysis situation of loans overdue: 49

3 / Analysis profitable of lending activities for consuming : 49

CHAPTER 3 51

SOME REVIEWS AND RECOMMENDATIONS TO IMPROVE THE EFFICIENCY OF CONSUMER LOANS AT COMMERCIAL BANKS OF ASIA - O CHO DUA BRANCH 51

I / Reviews 51

1 / Strengths 51

2 / Weaknesses 52

3 / About ACB - O Cho Dua 53

3.1  Completion and implementation of strict lending process 53

3.2  Diversification of consumer credit products and promoting consumer’s reputation loans 54

3.3  Do not see collateral is primarily base to make lending decisions 54

3.4  Valuation of collateral shoulg be scientifically  accurate  55

3.5  Promote marketing strategies bank 55

CONCLUSION 56

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LIST OF TABLES & CHARTS

Chart 1:  Comparison of consumer’consuming loans/ total loans and other loans 43

Chart 2:  Comparison of consumer’s consuming loans to total mobilized capital 46

Chart3:   Comparision   short-term,   long-term   loans   to   total   customer’s consumingloans  47

Table 1:  The structure of loan portfolio over years 42

Table 2:  Comparison between targets and implementations in ACB – O Cho Dua branch 44

Table 3:  Consumer’s consuming loans / Total mobilized capital 44

Table 4:  Loans by tenor 46

Table 5:  Status of loans overdue by year 49

Table 6:  Profit for consumer loans over the year 49

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First and foremost, I would like to express my deep love and appreciation to

my parents, brothers, sisters, and my little wife, who always encouraged me with

love and spiritually supported me throughout my life Especially, I am very much

thankful to my wife for her love, understanding, and continuing support to complete

this research work

I would like to express my deep and sincere gratitude to my advisor ASSc

Prof., Dr VU THANH HUNG for the continuous support of my thesis study and

research, for his patience, motivation, enthusiasm, and immense knowledge in all

five academic years I appreciate all his contributions of time, ideas, and funding to

make my thesis experience productive and stimulating

I also want to express my thankfulness to the National Naational Economics

University's Library for the technical supports

I would like to acknowledge my advisor MR Hung, who gave me valuable

and constructive comments on the manuscript and helped me to increase the quality

of the thesis

I would like to thank my research group members: Tzon-Han, Yu-Chuan,

Zhong Wei and Chao-Yu for the stimulating discussions and time worked together

I also wish to thank the labmates for their help and sharing during the time I worked

in DASD laboratory My thankfulness would also send to my friends who have

been studying in NCU for their sharing to overcome all obstructs in the study-time,

especially, Duy-Manh who we have had useful discussions for my research

Besides, I would like to thank everyone who supported and helped me to complete

research work directly or indirectly

Finally, I would like to acknowledge the financial, academic and technical

supports of the National Economics Universitym ACB - O Cho Dua branch

Especially, I thank Mrs Van (Director of ACB - O Cho Dua branch) the for their

support and assistance during my thesis study

Chuyên đề thực tập Tốt nghiệp

Executive summary

In recent years, Vietnam's economy developed rapidly, leading to the living

standards of people increasingly enhanced Catching up with the demand that Asian

commercial banks in general and ACB – O Cho Dua in particular large market has

been improving and enhancing products and services Operation area of Asian

commercial banks O Cho Dua branch are concentrated on working class

immigrants, civil servants, private business households, particularly in the small

business market So consumer credit outstanding proportion of loan sales and also

the major source of revenue of the bank Due to see the importance of consumer

credit for the operation of the Asian Commercial bank -O Cho Dua branch work has

always focused on consumer lending, contribute to the system to become the

leading retail bank Over time learning and training in the EBBA National

Economics University- HN and have access to vivid reality of credit operations in

Asia Commercial Bank - Branch O Cho Dua I noticed that the understanding and

analysis of the Consumer Credit operation is essential

From the above reasons I chose the theme: REAL SITUATIONS AND

RESOLUTION OF PERSONAL CONSUM CREDIT BANK OF ASIA

COMMERCIAL BANK - O Cho Dua Branch

This research aims to achieve the following objectives:

 Review the concepts and theories related to credits and banking loans

 Analyze and evaluate the current situation of customers loans of ACB – O

Cho Dua branch

 Give some recommendations to improve the efficiency of consumer loans at

commercial banks of Asia - O Cho Dua branch

This research aims to achieve the following questions:

 How could a loan be gived by the Bank?

 What is the current situation of customers loans of ACB – O Cho Dua

branch?

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 How to improve the efficiency of loans for consuming at commercial banks

of Asia - O Cho Dua branch?

Research scope

Object: customers in ACB - O Cho Dua branch

Location: in Ha Noi and especially in ACB - O Cho Dua branch

Time: data collection from 2013 to 2015

In theories, I review the Characteristics of Credit, the Functions of Credit in

general and then the concept and characteristics of consuming credit, Guarantee

credit methodology, Pledge of property Im Analysis of consumer’s consuming

credit, I make non-financial analysis and financial analysis using score system

method and Judgment method

In other hands, I show factors affecting effective personal credit including

factors from the Bank, factors from customers,cnollateral and other factor

Afterthat, I analyze and evaluate the current situation of customers loans of

ACB – O Cho Dua branch base on data collected from the branch's reports between

2013 and 2015 and use it to compare between consumer’consuming loans/ total

loans and other loans, between targets and implementations in ACB – O Cho Dua

branch, Analysis at the rate of consumer’s consuming loans / Total mobilized

capital, Analysis by tenor of loans, Compare short-term, long-term loans to total

customer’s consumingloans, Analysis of each loan Analysis situation of loans

overdue and finally Analysis profitable of lending activities for consuming

Therefore, I can point out strengths and weaknesses of the bank From the

problems being shown I give solutions and recommendations to improve:

 Completion and implementation of strict lending process

 Diversification of consumer credit products and promoting consumer’s

reputation loans

 Do not see collateral is primarily base to make lending decisions

 Valuation of collateral shoulg be scientifically accurate

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 Promote marketing strategies bank.

CHAPTER 1 INTRODUCTION

Rationale

1.1 Reasons for choosing the thesis

In recent years, Vietnam's economy developed rapidly, leading to the living

standards of people increasingly enhanced Catching up with the demand that Asian

commercial banks in general and ACB – O Cho Dua in particular large market has

been improving and enhancing products and services Operation area of Asian

commercial banks O Cho Dua branch are concentrated on working class

immigrants, civil servants, private business households, particularly in the small

business market. So consumer credit outstanding proportion of loan sales and also

the major source of revenue of the bank Due to see the importance of consumer

credit for the operation of the Asian Commercial bank -O Cho Dua branch work has

always focused on consumer lending, contribute to the system to become the

leading retail bank Over time learning and training in the EBBA National

Economics University- HN and have access to vivid reality of credit operations in

Asia Commercial Bank - Branch O Cho Dua I noticed that the understanding and

analysis of the Consumer Credit operation is essential

Stemming from the above reasons I chose the theme: REAL SITUATIONS

AND RESOLUTION OF PERSONAL CONSUM CREDIT BANK OF ASIA

COMMERCIAL BANK - O Cho Dua Branch

Chuyên đề thực tập Tốt nghiệp

1.2 Research objectives

This research aims to achieve the following objectives:

Review the concepts and theories related to credits and banking loans

Analyze and evaluate the current situation of customers loans of ACB – O

Cho Dua branch

Give some recommendations to improve the efficiency of consumer loans at

commercial banks of Asia - O Cho Dua branch

1.3 Research questions

This research aims to achieve the following questions:

How could a loan be gived by the Bank?

What is the current situation of customers loans of ACB – O Cho Dua branch?

How to improve the efficiency of loans for consuming at commercial banks of

Asia - O Cho Dua branch?

1.4 Research scope

Object: customers in ACB - O Cho Dua branch

Location: in Ha Noi and especially in ACB - O Cho Dua branch

Time: data collection from 2013 to 2015

1.5 Research methodology

1.5.1 Research process

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1.5.2 Data collection

Data collection was collected from books, newspapers, scientific journals,

research reports, and v in ACB - O Cho Dua branch’s reports The data was

collected to find out the information about business activities, customers, business

results, etc

CHAPTER 2 THEORETICAL BACKGROUND

I / Concept, nature and role of credit

in barter economies as well, based on the direct exchange of goods and services

However, in modern societies, credit is usually denominated by a unit of a account

Unlike money, credit itself cannot act as a unit of account

Movements   of financial   capital are   normally   dependent   on   either   credit

or equity transfers   Credit   is   in   turn   dependent   on   the   reputation   or credit

3 The function of credit

3.1 Focus and redistributed on the basis of monetary capital repayment

the refund, catering  mainly for production needs - the circulation  of goods and

services,   thereby   contributing   substantially   to   increase   the   growth   rate   of   the

 Besides   investment   in   fixed   assets,   medium-term   loans   as   a   source   of

working   capital   formation   for   business   frequently,   especially   those   newly

 Installment   credit   means   loans   including   loan   principal   and   interest   is

III / Customer’s consuming credit

1 / The concept and characteristics of consumer credit:

3 / Classification of consumer credit

3.1 / Direct Consumer credit

That   is   the   bank   customer   in   person   interview,   assessment   and   credit

 Credit   cards:   the   credit   operations   of   banks   that   issue   cards   to   persons

eligible   for   assigning   credit   limits   to   customers   can   make   the   payment   (cash

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3.2 Indirect Consumer credit

As   the   operation   through   the   purchase   of   receivables   arising   from   sales

Consumer   credit   enhances   the   productive   capacity   and   competitiveness   of

enterprises   Through   the   method   of   indirect   consumer   finance   companies   can

5 The measures to gaurantee credit

5.1 / Guarantee credit methodology

For  this  method,   the  bank is   also interested   in  the   ability  to  repay,  the   current

economic   conditions,   warranties   must   have,   must   comply   content   of   lending

 In   summary,   in   Chapter   1   we   mentioned   credit   and   consumer   lending

contraction   conceptually,   functions,   roles   and   issues   related   to   the   work   of

main factors the bank, there are other factors from the bank's clients and other

objective factors

1/ Factors from the Bank

1.1 Credit policy of the Bank

Simultaneously   with   the   steps   in   the   credit   process   is   the   collection   of

information   Credit   information   faster,   more   accurate   and   comprehensive,   the

example,   for   large   projects,   step   analysis   is   very   important   Maybe   even   too

complex   cases,   banks   have   established   separate   appraisal   group   For   consumer

loans, the monitor uses more emphasis canduoc capital

1.3 Business banking institutions

Organization   of  the   banks   need  more  specific   and  scientific   arrangements,

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Besides   credit  staff   should   have   a   broad  understanding   of   law,   social  and

economic   environment,   the   way   the   country's   development,   the   change   of   the

1.5 The mobilization of capital

The   mobilization   of   capital   affect   credit   quality   and   short-term   deposits

legal system does not sync, or a change would make operations difficult

Conversely,   if   it   matches   the   actual   objective   would   be   to   create   a   legal

environment   for   all   business   and   production   activities   proceed   smoothly   and

disasters   (drought,   floods,   earthquakes   ),   fires   would   affect   production   and

business   operations   of   customers,   especially   in   sectors   related   to   agriculture,

fisheries, customs san.Vi natural environment so as not favorable, enterprises will

have difficulty thereby reducing the credit quality of the commercial banks

Above are the main factors affecting the credit quality of the commercial

banks To improve credit quality, we need to study and correct understanding of the

factors, along with the practical results of operations of the commercial banks, so

that given the corrective measures taking feasibility.

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CHAPTER 3 OVERVIEW OF ACB – O CHO DUA BRANCH

 Business registration certificate: No 059 067 issued by the Department of

Planning and Investment of Ho Chi Minh City for the first time on 19/05/1993

registration and registration changes 05.11.2007 10th day

 Tax code: 0301452948

2 Business live: monophyletic

The   main   activities   of   the   bank   and   its   subsidiaries   (the   Bank   and   its

subsidiaries collectively referred to as the Group) are to mobilize short, medium and

long-term capital in the form of savings deposits, cash payments, stock deposit;

receiving capital investment trusts; receiving capital from credit institutions inside

and   outside   the   country;   making   short,   medium   and   long   term   loans;   discount

commercial  paper,  bonds  and valuable  papers;  investing in stock  and economic

organizations;   payment   services   among   customers;trading   foreign   currency   and

gold,   silver;   international   payments,   factoring,   brokerage   and   stock   investment;